On Monday 30 October 2006, the Hon Chris
Carter, New Zealand Labour Government Minister of Housing
addressed (refer attached speech above) the Local Government
Housing Affordability Forum in Wellington. He stated that
the Government recognises that the lack of housing supply is
the core problem and outlined some suggested solutions that
need to be considered.

He also said that the purpose of
his speech at this stage is to encourage greater public
discussion, prior to policy options being
considered.

“Chris Carter must be warmly congratulated
for the open approach he is taking to this issue and being
clear in that the Governments focus is very much on
increasing housing supply” said Hugh Pavletich, co author
of the Demographia International Housing Affordability
Survey www.demographia.com . adding “But regrettably, his
initial suggested mix of interventionist solutions will not
work. Put simply, urban land supply must be opened
up.”

Hon Chris Carter outlined the seriously
deteriorating New Zealand home ownership levels, which are
now below those of the United Kingdom, United States, Canada
and Australia. In 1991 our ownership level was 74%; in 2001
it had slumped to 68% and is now estimated to be 65%, with
Auckland just 61%. The latest Census information due for
release 9 December will clarify the situation.

New
Zealand’s housing stock is approximately 1,400,000 units,
which suggests that in less than five years around 43,000
houses have been priced out of home ownership, forcing
people to rent.

“These sorry figures indicate that
120,000 New Zealanders have been denied the right to the
opportunity of homeownership in just five years. Since 1991,
a shocking 352,000 people have been thrown in to the rental
market. This represents populations in excess of
Christchurch and Manukau” said Mr Pavletich, adding “No
wonder our crime statistics are up and social indicators are
down, as young people in particular, are being denied the
opportunity to participate fully in our society.”

The
2006 Demographia International Housing Affordability Survey
www.demographia.com of the United Kingdom, Republic of
Ireland, Canada, United States, Australia and New Zealand
released January this year, identified 24 urban markets of
the 100 surveyed as currently “affordable”, in that
people did not have to pay any more than 3 times their
annual household income to house themselves.

New Zealands
position, as outlined within the Ministers speech and the
Survey, is that New Zealanders housing is at in excess of 6
times incomes. In 1991 New Zealand housing costs were near 3
time’s household incomes.

“It is important New
Zealanders realize that these inflated prices creating this
unnecessary social havoc, are artificial and caused simply
by inept local politicians and planners, for misguided
ideological reasons. All they need to do is ensure an
adequate supply of land to solve the problem” said Mr
Pavletich.

New Zealand’s land area is 269,000 square
kilometres of which substantially less than 1.4% is
urbanised. To provide sufficient land for further urban
development would require 29 square kilometres or one
hundredth of one percent of New Zealand’s land area each
year.

“We couldn’t urbanise any more than a total of
2% of our total land area over the next 50 years if we
tried”said Mr Pavletich.

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